If you survey the abundance of internet reviewers, bloggers and commentators, you are certain to find 10 years’ worth of complaints about price hikes. The passionate whisky hobbyist’s budget is stretched thinner and thinner. Those lucky to have hoarded whisky from years ago are in a very fortunate position. Many are hoarding today to protect against future price rises.

Nevertheless, I have heard it said on occasion that whisky in the UK is undervalued, or too cheap. It’s claimed that whisky makers are failing to make any profit. They are squeezed by increasing costs and crippling taxes that, in the UK, can account for up to 70% of the shelf price. This may be more relevant for the lower end whiskies, where supermarkets control access to the retail space and drive hard wholesale bargains to allow for periodic deep discounting.

At the more premium end of the spectrum, the products are far removed from the initial costs of production. Take Talisker 18, which will largely have been distilled in 2002-2003 at much lower prices. Warehousing is a relatively small cost; bottling, packaging, and marketing are at 2021-2022 levels. I can’t personally break down the cost of well-aged whisky based on overhead and find any narrow margins.

Looking at Diageo’s own 2021 preliminary results, we can see them report an operating profit of £3.7 billion, up by +75% year-over-year. The report goes on to describe broad growth across Scotch, tequila and Chinese white spirits. They are increasing the dividend to investors and aiming to return 10-year annualised total shareholder return to 13%. In fact, most investment pundits identify Diageo as a great investment opportunity in 2022, given the return to on-sales by the general public and continued consumer demand going forward.

Whisky retailers generally have a tough time, carrying huge inventory and making minimal margins. The instant sell-out bottles from any given outturn are outnumbered by those more likely to gather dust. Certainly, the retailers’ margins do not seem to be increasing… although I do know of a few cruising around in Lamborghinis, so let’s not dwell too long on their plight.

Perhaps you thought all of this success celebrated in Diageo’s results will be shared with the consumer? Maybe you hoped prices would be held at 2021 levels into 2022? Well, think again. Obviously, Diageo’s only duty is to their shareholders; therefore, from February 2022 you can expect -in the UK at least – the following price increases for your favorite Diageo products:

Lagavulin 16 will increase by +42%. This first age statement release from Lagavulin has been recognised as a value-for-money whisky with a relatively high age statement and relatively accessible price. Not any longer.

Mortlach 16 is going up +39%. This is one distillery that has had wild price swings over recent years, having first been “premiumised” with face lift branding and huge price hikes before being adjusted down to more accessible prices when that premiumisation experiment failed to win favour with consumers.

Oban 14 going up +92%. This low strength easy sipper has a fan base, however I would struggle to justify paying any more than current shelf-price.

Talisker 25 is going up +67%. This release is the least approachable for most consumers currently selling at around £300 a bottle. I expect that those who can already afford this whisky may well be able to afford this adjustment in price if they desire it.

Talisker 18 will going up +194.5%. When news of this broke in the whisky world there was a flurry of purchasing to stockpile a great dram at an accessible price. Interestingly, the new price of the Talisker 18 will be around £250, which is just under the retail price for Macallan 18. Might this move be motivated more by premiumisation of Talisker, with an eye on the successful Macallan brand, than driven by supply-chain cost increases?

These figures have been independently verified by two independent UK retailers. If and when in February these price rises will land? Currently Diageo’s own website has the prices at 2021 levels but may of these bottles are now showing as out of stock [at 08/02/2021].

Naturally, there may be some sort of reasonable explanation. I reached out to Diageo to help explain what’s happening. A Diageo spokesperson said, “We don’t comment on the confidential details of our commercial terms with our customers.”

Predictions about the demise the whisky enthusiast, priced out by collectors and speculators, have been around for over a decade… and yet, here we still are, drinking and enjoying Scotch. The whisky Loch of the 1980s is dry, and well-aged whisky is now a scarcity for which we must pay a high price. I truly hope that asking questions of Diageo’s PR and publishing articles like this encourages these producers to look beyond the income statement and consider the importance and value of a loyal customer base. If not, drinking Diageo whisky instead of investing in their stocks will look like a mug’s game.

I don’t enjoy writing doom and gloom, so it’s great news that there are still bargains to be had. The Wine Society released a 30 year old unnamed Islay single malt scotch recently for just £140. Well-aged Tormore still gets released at under £150, but these sorts of treats do seem to be becoming more of a rarity.

Talisker 18 Years Old – Review

45.8% ABV. £80.49.

Colour: Gold.

On the nose: Rich toffee, gentle wind-blown smoke, rich juicy cantaloupe melon, bruised apple, some dry ash, more butter toffee, showing a great balance between youthful vigour and aged grace. Peach clafoutis, a pinch of salt.

In the mouth: Medium body, a little hot at first, smoke dropping away to slated toffee apple crumble and some spicy wood notes. This has a really great midpalate that takes quite some time to develop and evolve across the course of the dram it’s slightly sour with hints of dunnage then becoming quite elegant, finally some spicey wood notes, lingering peat smoke gives a final lick of umami.

Conclusions:

If the Talisker 2021 Special Release was raw storm-bound Skye with the wind and sea spray howling in your face, then this Talisker 18 is more fond memories of warm summer’s day rock pooling followed by a BBQ.

At £80 I would have to agree with Diageo that this seems under-priced. At £125 it would be more in line with similar products from other producers such as the Bunnahabhain 18 or Balblair 18. A rise to £150 would seem cheeky, but perhaps would not interfere with my stride, such is the way of whisky these days. At £250 it’s outrageous and I would immediately deduct 2 points from this score. But for now, at £80 this is great, and perhaps worth a further point if I was drinking it on a beach in Skye.

Score: 7/10

Talisker The Distiller’s Edition 2013 – Review

48.8% ABV. Perhaps around £50 at the time of release. 2002-2013; double matured in Amoroso Casks. This is a bonus dram I found on the dram list from Fisherman’s Retreat when I was purchasing the 18 year old.

Colour: Rose gold.

On the nose: Sweet peat, strawberry jelly, smoked raspberries, freshly sliced red chilli pepper, liquorice, salted fennel seeds, Calpol cough medicine, cherry Jolly Ranchers.

In the mouth: Sweet, difficult to define initially, medium weight, developing into cherry notes, a bit juicy, boldly smoky, the sweetness drops away toward the end and the wine and peat combine for a very drying slaty medium length finish that has lingering cough medicine going on.

Conclusions:

Talisker fans are a particular crowd. Most of them raved about the 2021 Special Releases bottle for presenting the more forceful side of the distillery, whereas I was unmoved. I imagine those same fans would enjoy this fruity take on the distillery output. Its success is not in doubt, as the 2020 Distillers Edition was also in Amoroso casks and priced at a fantastic £66.49, now sadly out of stock. This is nice whisky, but I would not want a whole bottle.

Score: 5/10

Talisker 18 and Distiller’s Edition photos courtesy of The Whisky Exchange.

CategoriesSingle Malt
Graham

Graham is at the consumer end of the whisky world; constantly seeking out a bargains and generally very cautious with his limited budget. An occasional visitor to distilleries and a member of the odd whisky club. He does not collect whiskies but has a few nice ones put away for some future special occasion. He enjoys discussions with the wider whisky community and may resemble the ‘average’ Malt reader.

  1. R says:

    I’ve seen this claim circulating on the Internet but I’m not clear if you’ve done any additional reporting that confirms it or just cut and pasted. It’s worrying if true, but so is much of what passes for “news” online.

    1. Graham says:

      R,

      Thanks for checking, yes beyond multiple retail sources I also reached out to Diageo with the specific figures. And got the journalist ‘we can neither confirm nor deny’ response.

      Diageo are aware the article was being drafted.

      Regards,

      1. Mark says:

        As much as I don’t like saying this I hope Talisker crashes and burns. That is an outrageous price increase and if consumers settle for this then they’ll all be at it and we’ll have nobody but ourselves to blame.

        1. Garry says:

          Not going to happen tho Mark, Talisker a owner, Diageo are one if the biggest spirit retailers in the world, the revenue from Talisker is but a drop in the ocean, Smirnoff, Gordon’s Gin, Guinness, 7 other single malt distilleries… Johnnie Walker ‍♂️

  2. Patrick says:

    Thank you very much for bringing these price hikes to my attention! I think the price of bottles like Talisker 18 and Mortlach 16 may be out of my league from now on. Oh well, on to a pursuit of new bargains…

    1. Graham says:

      Patrick,

      Thanks for commenting. These prices have not taken effect on the Malts.com website so hopefully this sort of consumer-led article might yet prompt a change. But I certainly recommend a bottle if you are lucky enough to find one at the old RRP.

  3. Scott says:

    Wow! I had to double check where the decible point was, or whether it existed on some of those figures. Outrageous and most should have the common sense to walk away from those bottles. Making whiskey the preserve of the wealthy goes against all the ethos of our great hobby being a social pastime and all the benefits that confers. People will just move on to other spirits, or like me, buy more rum and less whiskey. Quite depressing really.

    1. Graham says:

      It’s a tricky one for a publicly traded business. They are duty bound to make the most money for their shareholders.

      But short term profiteering now, due to a squeeze in stock risks putting of customers who would have had a purchasing relationship for 30 years or more. Will make attracting new customers very hard.

      Without any dialogue it’s hard to understand where the consumer fits into these pricing decisions.

      Cheers anyway!

  4. Rich says:

    Greedy bar-stewards. It won’t last forever; collectible items are only collectible if they are scarce. As soon as people buy without consuming, you begin to create a glut in supply down the line. Why, once you have the bottle on the shelf and unopened, would you buy another? Guarantees a collapse in the market down the line- anyone remember the 90s fad for toy cars to
    Keep in the box and sell on for a profit? Funnily enough, nobody made a profit except the manufacturers and that didn’t last. I look forward to their fingers getting burned – wankers

  5. Andy says:

    If Diagio are going to take the mickey then they’ll get no more of my cash. I’m lucky I stocked up on Lags when they were £38 a pop on Amazan a couple of years ago and have a number of Taliskers for the next few years.

    I’ll be mainly supporting the indi bottlers and smaller distillery owners as it feels that a lot of the distilleries are just big business and only interested in short term profit – at the detriment of their long term fanbase/drinkers.

    1. Graham says:

      Andy,

      You hit the nail on the head here. A global company with a global view will shift allocation of the product doesn’t sell in the local market.

      However we should support the small independent bottlers who only operate in our home market. Making the most of the choices available.

      Cheers,

      Graham

    2. Tony says:

      Hi Andy, the following is a list from an old since-removed MALT article of independent scotch producers:

      * Ardmanurchan
      * Edradour
      * Daftmill
      * Isle of Arran
      * Glenfarclas
      * Loch Ewe
      * Kilchoman
      * Abhainn Dearg
      * Bladnoch
      * The Speyside Distillery

      I haven’t seen any of those on the shelf by me, but I mostly shop local Midwestern US distilleries when I buy bourbon/rye. I do what I reasonably can to avoid throwing any weight behind unscrupulous practices such as what Graham wrote about Diageo.

      Good luck out there.

      1. Graham says:

        Tony,

        Unfortunately we have lost a few articles from the back catalogue recently. The article you describe sounds very useful and we will see what we can do to create an updated article to fill the gap in due course.

      2. Garry says:

        I think recently looking at something similar there was close to 30 independent/non large company owned Scotch producing distilleries, with several appearing in the last year or so, from your list Ardnamurchan is a firm favourite and last year had some US only releases

  6. Simon says:

    Wonder if Clynelish 14 will be going up, its a contender for best value for money in the diageo portfolio in my eyes. Might have to stock up just in case.

    1. Graham says:

      There is a fair chance it might. But it’s not part of the verified information I came across. I saw that half bottles were discounted on Amazon yesterday.

      1. Heeksy says:

        Just bought a bottle of Clynelish 14 on amazon at just over 35 quid. Thanks for the article and hopefully others will be able to purchase at the same price

  7. Welsh Toro says:

    Th 18 is not underpriced for Christ’s Sake. It’s what it’s worth unless you throw your money away in the modern way. It’s good stuff and better than the 10 but only just.

  8. Welsh Toro says:

    Talisker 18costs quite a bit more in the States than it does in the U.K but that doesn’t mean it’s underpriced. I bought a bottle not too long ago after a gap of a few years. Came to the same conclusion I did back then. It’s a decent whisky but not much better than the 10 and that includes all the negatives. It’s obviously coloured, chill-filtered and still below 46% abv. As a whisky veteran I don’t think it’s worth a penny over £100.

    When Diageo rebranded a premium range of Mortlach sales bombed. Even in our crazy whisky world people dropped that like a stone because of the price and they were forced into a volte face. Who the hell do they imagine buying Talisker 18 for £250 a bottle? The Americans don’t buy it any more and even the most loyal Talisker fan in the U.K wouldn’t bother. We have entered a global recession and even whisky geeks will tighten their belts. Millionaires might afford it but they don’t drink as much of it as we do. That’s what Diageo have to factor. It failed with Mortlach and it will fail with Talisker and Lagavulin. I know many, myself included, that don’t buy Lagavulin 12 any more and we used to buy lots of it. Lagavulin 16 is priced right (£69) considering its 43% bottling strength. At 46% it would be worth more but they would loose so many sales. Lagavulin 16 is still sold as a premium drink in bars and restaurants all over the world. You can pay $20 euros a glass in Spain. If it was $40 euros a glass nobody would buy it.

    Let’s just wait to see if they really go ahead with this. Diageo will loose an awful amount of their regular customers, repeat customers, if they do. The ultra rich that they’re targeting just don’t drink as much. A token bottle will gather dust.

    1. Graham says:

      Toro,

      I keep checking Malts.com and the Talisker 18 remains out of stock at the lower price. I hope Diageo are reconsidering.

      I completely agree that it’s the drinkers who replace bottles not those who view whisky as a status symbol but Diageo sell basic blends to the drinkers and seem to see single malt as ultra premium collectibles. Given the narrow wedge in their portfolio for single malts I can imagine why that makes sense in the boardroom but seems madness on the streets.

      Time will tell,

      Graham

      1. Welsh Toro says:

        You’re right. It seems to have vanished. I spoke to a whisky retailer yesterday and he assured me it was likely to see a jump in price.

Leave a Reply to Graham Cancel reply

Your email address will not be published.